The RBI has surprised markets and economists by cutting the policy interest rate by quarter of a percentage point to 6.25 per cent and changed its monetary policy stance to neutral from a fairly long spell of calibrated tightening — twin moves designed to remove the chokes to economic growth.

In a 4:2 split decision, the six-member monetary policy committee signalled that the central bank would no longer be driven by former RBI governor Urjit Patel’s inflation-obsessed agenda, especially at a time when retail inflation tumbled to 2.19 per cent in December.

The cut in the policy rate — the first since August 2017 — signals that new governor Shaktikanta Das intends to focus on a dual mandate of price stability and growth.

“It is vital to act decisively and in a timely manner to address the objective of growth once the objective of price stability as defined in the RBI Act is achieved,” Das said.